Weather the Storm

Last week’s annual conference of Western Association of Chamber Executives was packed with invaluable guidance through the white waters of our current economy. Of the many gifted speakers, Richard Weiss, executive vice president and chief investment officer for City National Bank, reminded us that this recession is part of a natural process.

“What goes up, must come down.”

“There is a time for everything, and a season for every activity under heaven…” (Ecclesiastes 3:1).

Officially declared last November, this recession began as early as December 2007. Mr. Weiss suggests that the economy will bottom out near the end of the second quarter and begin to rise at the end of the third. In mid-2010, we should experience expansion once again. His predictions agree with other sources, including 200 years of history.

But history also demonstrates the harmful results of interference with a natural occurrence. In a full-page ad of the February 9th Wall Street Journal, 250 members of the Cato Institute disagree with President Obama’s insistence that only a recovery plan by our government can jumpstart the economy.

The prestigious Cato panel points out: “More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan’s ‘lost decade’ in the 1990s…

To improve the economy, policymakers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.”

Supply-side and laissez-faire approaches require courage, patience, and maturity. Giving in to fear and panic leads to rash decisions of deficit spending, affecting generations to come.

And shame to those who use these temporary unfortunate circumstances to advance self-interest and greed! Consider the recent mishandled bailouts, the present Congressional “stimulus” packages laden with hidden social agendas, and irrevocable tax increases without sunset clauses.

The sky is not falling! For the moment, it’s best that we weather the storm. By the time what little “stimulus” revenues actually reach main street, the economy should be on the way to recovery… naturally.